Over the course of the past decades, China has managed to engineer one of the biggest turnarounds in history and is currently among the world’s most powerful nations. However, the bedrock of the country’s remarkable rise is rooted in its rapid economic growth. Very few countries in the world have managed to grow at the rate at which China has done over the course of the past seven decades. China is now perhaps one of the most important countries in the world in terms of trade, consumption and overall well being of the global economic system. Hence, its trade war with the United States has proven to be such a problem for global growth over the past months. To put it into perspective, a report by the McKinsey Global Institute has stated that by 2040, China’s attitude to open trade could add or remove around $22 trillion to $37 in economic value.
The stakes are too high at the moment, but it is interesting to have a look at how China grew into the superpower they are today. It became the world’s second-largest economy back in 2010 and having upstaged Japan to that spot, China has held on to the spot quite firmly. Some economists believe that China will eventually go past the United States around 2030. However, the World Bank had stated in 2014 that in terms of purchasing power parity, the country is already ahead of the United States.
On the other hand, the Chinese political leadership has also been heavily invested in the country’s economic growth. The reforms started back in 1978 under Deng Xiaoping, and from then on, the country continued to grow at a breakneck pace. The recent update which strenghthens this idea reveals that the country will see its own NASDAQ style trading venue within the next 12 months.
Although questions remain over the data that is released by the Chinese government, there is no doubt that the political leadership has been a major factor in the country’s economic growth. The other factor that accelerated China’s hyper-growth was the manufacturing sector that saw it become the ‘factory of the world’. It was back in 2001 when a report from the World Trade Organization revealed that China was the ‘world’s factory’ and also the biggest trader. Currently, it is the largest source of imports for as many as 65 nations, and that gives it enormous leverage on the political front. Last but not least, the flow of foreign investments into the country has also cemented its place as a superpower in the modern world.